When a pending home on the market goes back to an active listing, those searching for a home will wonder what went wrong? Was there something wrong with the house?

Up Next: Pitfalls To Avoid When Getting A Home Loan

When a home is no longer pending, it could be due to a few factors:

The Mortgage Loan Fell Through

home no longer pendingMortgages can fall through for many reasons, including the buyer increasing their debt-to-income ratio or not having enough funds for closing or down payment. A falling credit score could also be a culprit. Whatever the reason, when a mortgage loan falls through, the sale of the pending home can overturn, putting the house back on the market.

Buyers can help prevent their mortgage loan from being rejected through responsible fiscal management. This include:

  • Saving up enough money to cover all costs
  • Not financing large purchases, like furniture for the home
  • Keeping up with all payments to help prevent credit score drops

The Home Inspection Uncovered Defects

Home inspections are a critical part of the home buying process. These inspections evaluate the home’s condition and can be done at any time in the purchasing process. A house might lose pending status if the inspection uncovered a defect, and an inspection contingency was in place. A contingency is a clause in the real estate contract that releases a party from the contract’s obligations if a provision is not met. In this case, an inspection contingency.

The Home Was Appraised Too Low

If a home is appraised for a lower price than what the house is selling for, the sale can fall through. This is especially true if the seller does not want to negotiate and bring the home price down. So, the buyer leaves, putting the house back on the active market.

Purchasing a home for more than what it is worth is a flawed idea in that the buyer will be underwater—when the home loan is for more than the home is appraised for—and lenders will not legally issue a loan.

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The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.